Market Recap May 31, 2016

Indexes finished mixed in a rather benign session as most traders are probably still on an extended Memorial Day vacation. The S&P 500 fell 0.10% while the NASDAQ added 0.29%. Most of today’s economic data was “meh”:

The Chicago PMI came in below expectations and in contraction territory at 49.3 in May.
The Dallas Fed manufacturing index declined from minus 13.9 to minus 20.8 in…

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Stock Trading To Go

Perfecting the Pullback Market Update and Stock Scan May 31

We were focusing closely on the 2,100 level in the S&P 500.

With divergences this morning, we’re seeing the logical and expected pullback.

Let’s update our levels for the S&P 500 Index and note the big trending stocks today:

Take a moment to view this morning’s @ES (eMini) update for additional levels and planning.

From that post, we’ve already achieved our 2,087 target we mentioned, and we’re focusing our attention there.

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Let’s see what our Breadth Chart reveals about current market strength (or weakness):

We’re seeing weakness across the board except in the Defensive or Risk-Off Sectors (Health Care and Utilities).

Energy is the “strongest” sector with 50% of stocks positive right now.  Caution is warranted.

Here’s a top-level or full-perspective view of today’s S&P 500 stock performance (courtesy of FinViz.com).

Here are today’s strongest trending (intraday) names – candidates for pro-trend continuation:

Tata Motors (TTM), Westar Energy (WR), Transdigm (TDG), LinkedIn (LNKD)

Bearish downtrending candidates include the following stocks from our “weakness” scan:

Great Plains Energy (GXP), Constellation Brands (STZ), Boeing (BA), and Novartis (NVS)

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Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

Did You Sell in May? Hope you didn’t go away!

The old Wall St. adage of sell in May and go away looked like a winning theme early in the month but if you actually “went away” and didn’t react to the turn in the markets you turned a winning short trade into a losing month. As traders return from the Memorial Day holiday, May is set to become the third straight winning month for the S&P500 index. March gained 6.6% and April inched 0.3% higher; May begins the last day of the month up about 1.6% reversing an early month sell off.

S&P 500 Index
Source: OptionsHouse

The market’s strength has not been lost on the Federal Reserve governors as expectations for another Fed Funds target rate increase in June or July have increased lately. Friday this week, the all important non-farm payroll numbers will be released which will provide job creation data for justifying the timing of their decision. The expected non-farm number has been lowered due to the Verizon strike to a rise of 155,000 according to Barron’s magazine. As another rate rise apparently is looming, the dollar strengthened, reversing what had been a rally in Gold. Oil broke above 50 dollars per barrel in contrast, and the overall market remained resilient in the face of increasing hawkish tone of the Fed.

SPDR Gold Shares ETF
Source: OptionsHouse

Speaking of the Fed, on Wednesday the Beige book of regional economic conditions will be released. Investors may see potentially an improving economic situation, justification for a move sooner rather than later.

It will be an interesting short week – if you remember the markets rallied heading into the first rate increase, only to tumble in the weeks following the actual rate move. Will this be another case of buying the rumor but selling the news? More Wall St. adages, I know, but an adage becomes an adage because they actually happen with enough regularity to catch on.


OptionsHouse Blog – OptionsHouse

Massachusetts taxpayers buy insulation for a multi-millionaire

I know a multi-millionaire who lives in a huge fancy house. He is working on selling his old house, worth about $ 800,000, but in the meantime his dad lives there. Dad doesn’t have any income so he has been getting taxpayer-funded heating oil to keep the five-bedroom place toasty (but maybe not for the pool heater?). Now it turns out that the taxpayers are spending $ 7,500 on insulation work due to the fact that the resident qualifies for heating fuel assistance.

I asked what will Dad do once the place finally sells? “I have him on a wait list for public housing in 18 towns.”

Related:

Philip Greenspun’s Weblog

Logical Pullback Emini Update May 31 with Targets

Last week’s bullish pre-holiday action is now giving way to a logical pullback against resistance.

Here’s today’s updated Fibonacci and Emini (@ES) trading levels for your plans and trades:

The @ES (Emini S&P 500 futures) rallied all the way to the 2,100 upside target last week.

We’re now seeing a logical pullback or retracement “down away from” the 2,100 level right on schedule.

Note the extended negative divergences in both momentum and internals (Breadth) before the pullback.

Our first downside target is in play at 2,087.

Use this Fibonacci Grid for targeting and planning intraday and short-term trades.

Get these levels in advance with in-depth planning and trading opportunities by joining the Daily Membership.

Afraid to Trade Premium Content and Membership

Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.

Corey Rosenbloom, CMT

Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

Last Post for May

Today is the last trading day of May and unless we see a really serious decline today, the monthly candles for May on NDX and SPX are going to confirm breaks above the monthly middle bands, which at the least isn’t going to do any harm to the bull case. Shorter term SPX is still within […]
Slope of Hope

Memorial Day Thoughts

Now that the kids are in bed it is time to reflect a bit on Memorial Day. I’ve been listening to Masters of the Air: America’s Bomber Boys Who Fought the Air War Against Nazi Germany as an audiobook. One sobering statistic is that only about 25 percent of the early B17 crewmen completely their 25 missions and came home in one piece. After facing terrifying flak and fighter attacks they would get back into the planes somehow and head out despite knowing that the odds of a safe return were not very good and also that neither were the odds of substantially affecting the German war effort (the average bomb dropped by U.S. bombers in World War II was off target by about three quarters of a mile, according to an official study quoted by the author).

As a pilot I don’t have a lot of trouble imagining that they went out on their first mission, but I have trouble imagining the kind of courage that it took to go out on the 2nd through 25th.

Anyway, I am grateful that at least some Americans had that kind of courage and to them I give thanks today.

Philip Greenspun’s Weblog

AMAT Chirps, b2b Ramps, Yellen Hawks and Gold’s Fundamentals Erode

Following is the opening segment from the May 29 edition of Notes From the Rabbit Hole, NFTRH 397: If we are going to highlight improving fundamentals, which we did as gold out performed commodities and stock markets, then we also have to highlight and respect eroding fundamentals; no ifs, ands or buts. The plain and […]
Slope of Hope